U.A.E. Central Bank Governor Says New Mortgage Law May Be Eased

By Mahmoud Kassem and Zainab Fattah -
Feb 27, 2013

The head of the central bank in the
United Arab Emirates said new restrictions on mortgages may be
changed after protests by the nation’s lenders.

The central bank issued rules on Dec. 30 that restricted
mortgages for expatriates to 50 percent of the value of a first
home and 40 percent for the second. Limits also were tightened
to citizens to 70 percent of value for the first dwelling and as
much as 60 percent for a second, from no limit previously.

“The central bank is not taking a binding position and is
listening to what the banks have to say,” Governor Sultan al- Suwaidi said today at a conference in Abu Dhabi. “What was
published was not an order. The system that will be put in won’t
necessarily be according to the percentages that we published.”

Banks are lobbying to increase the loan amounts to spur a
recovery in credit growth four years after Dubai property prices
crashed amid the global financial crisis. They’re recommending
the central bank raise the limits for expatriates to 75 percent
of the value of a first home and 60 percent for the second.
U.A.E nationals should be able to borrow 80 percent of the home
price for the first mortgage and 65 percent for second homes.

“What was published was not an order, it was a
notification,” al-Suwaidi said.